Interprovincial Disparities in China: Output and Consumption, 1952-1987

Abstract

The flood of economic information from China in recent years has permitted reassessment of the "Chinese model of development" and the extent to which China's own development experience has conformed to it. The prevailing consensus of the 1970s concerning the substance of the model itself-typically characterized in terms of the Chinese leadership's objectives and priorities and its strategy for pursuing them-has stood up quite well. The same cannot be said about past appraisals of the extent to which China's economic reality has been reshaped to accord with the model's prescriptions. One of the most widely remarked elements of the Chinese model is the high priority assigned to regional objectives and, more specifically, to "balance" in the distribution of productive capacity and equity in the distribution of income and, hence, consumption. During the Maoist era (i.e., prior to 1979), the central government pursued regional objectives through such measures as interregional transfers of investment resources (effected via the planning system), subsidization of health and education expenditures in poor regions, and attempts to maintain a safety net of state relief (effected largely via control of grain surpluses). In short, there is little doubt that prior to 1979 the Chinese leadership placed an unusually high value on the spread of modern growth and the improvements in welfare associated with it and persistently acted to limit the emergence or widening of interregional disparities.' Although China's post-Mao leaders have shown greater concern with efficiency and with the potential trade-offs between efficiency and such goals as balance and equity, their continuation of many redistributive policies indicates that they have not abandoned regional objectives. But how successful has China been in achieving these objectives?